Money managers under the microscope
Spare a thought for quant-heavy hedge fund firm BlueCrest.
The company’s systematic trading funds rely on the supercooled servers that crunch the numbers to run their, hopefully money-making, algorithms, so it must have come as quite a shock when their Japanese hardware was put under lock and key when Lehman bit the dust.
One year on and the firm is still waiting for a postcard. BlueCrest traders have even started calling the imprisoned server ‘ET’, after the castaway alien in Steven Speilberg’s teary blockbuster.
Of course, the Japan leg of the business isn’t running it’s black box strategies through the office Casio calculator. It resurrected its own Japanese infrastructure and now has a server humming and blinking away in a third-party data centre, coincidentally right next door to its incarcerated predecessor.
from Joseph Giannone:
More than a year after one of the hedge fund industry's best known managers departed Goldman Sachs, Mark Carhart re-emerged at a hedge fund conference and told Reuters the big news: he is coming back. You heard it here first.
Mark and his longtime partner, Raymond Iwanowski, retired last March and with research head Giorgio De Santis. More than 12 years of strong performance from Goldman's quant team had made Global Alpha the bank's flagship fund and one of the industry's largest at its early 2007 peak of $12 billion.
The worst financial crisis in 80 years has tarnished many previously sparkling reputations.
In fund management, as in banking, many managers who previously looked like the shrewdest around were left looking like investors who could profit well enough in a bull market, or even during the dotcom bust, but just couldn’t deliver the goods when times got really tough.